Economics has a reputation as a difficult, not to say daunting, subject. On the face of it this should be a paradox, since economic activity, in one way or another, is something that everyone engages in almost every day. Yet there is an observable chasm between individual ‘economic’ experience and the discourse of economists, beyond any merely academic obfuscation. That gap alone may dismay, but the ‘dismal science’, as it was known from early on, provokes many to turn away perhaps not least because it always seems to offer unpleasant conclusions to almost everyone, not least the working class.

The answer to this problem is certainly not to attempt a ‘common sense’ economics, as that almost invariably produces know-nothing conclusions, such as the assumption that the state’s finances should work like that of a household. It is simply true that the impact of individual economic activity can produce results not intended or recognisable to the actors concerned. In this sense the whole really is more than the sum of its parts, and the individual is not an atom but a social being. Moreover capitalism in particular produces results and tendencies that are notably perverse; overproduction of goods leading to depression and scarcity, for example. Capitalism as a system appears to supersede the wills of even its most powerful actors, such that it would seem that our lives are ruled by apparently ‘natural’ laws of what is in fact only a historically specific state of affairs. For an endeavour that is quintessentially materialist in nature, economics has a decidedly mystical or metaphysical appearance for the intimidated lay observer.

Despite sharing the forbidding aura of difficulty with other economic texts, Marx’s Capital is precisely the book that promises to liberate us from the oppressive weight of capitalist economic logic. As political economy, it renders natural laws of economics into historical and social dynamics, potentially therefore subject to human control. Capital remains, by far and away, the most important examination of both bourgeois economics and the capitalist system itself that has ever been attempted (it might be noted that it is probably the most important unfinished work of modern literature). Marx’s task was to reveal what lies hidden underneath the appearances of capitalism. Classical bourgeois economists attempted to explore the nature of capitalism through what were, to their lights, common-sense starting points, such as the rational, acquisitive individual. However, it turned out that behind apparently obvious and concrete phenomena such as profit and price lurked rather more mysterious issues to do with value, such as the contradictions between its forms as ‘use value’ and ‘exchange value’.

Modern economics has not solved the problems thrown up by classical economists, but largely by-passed them. While at least classical economists did try to start with what they assumed were irreducible premises, such as the rational individual, much modern economics makes assumptions that are well outside any common-sense formulations. The recurring tendency to claim in each sustained boom that a new crisis is impossible this time, despite all the evidence to the contrary, might be considered a case in point. The alternative, however, is not to turn away in trepidation at a difficult and dismal subject, but to explore the hidden realities of our lives in capitalism, and to discover the real relationships and contradictions that both ordinary ‘common-sense’ and bourgeois economics would hide from us.

There are an increasing number of helpful introductions to Capital to make it more accessible for those reluctant to jump in feet first. The German Marxist Michael Heinrich wrote this introduction in 2004, and it is very welcome that it is now available in English. One aspect of Capital that could well seem daunting is the number of terms with quite precise meanings, such as the various concepts of value, their distinction from price, or surplus value, which is not quite the same thing as profit, or even further, the various specific forms of capital. An understanding of these is not in fact difficult to acquire and Heinrich’s short book is a crisp and clear introduction to all the relevant concepts, and the very exact ways in which Marx uses them. In fact a very large number of supposedly definitive refutations of Marx’s theories in Capital rest on misunderstandings of his analytical apparatus.

Neo-classical economists typically translate Marx’s language and methodology into their own terms, not noticing the important differences and distinctions, and are thereby able to ‘disprove’ Marx’s labour theory of value, for example. Heinrich is particularly useful here in offering some neat rebuttals of the standard objections. A common-sense ploy notes the inflated prices of some commodities, such as a work of art, whose exchange value is clearly not strongly related to the labour expended in its creation (pp.42-3). However these kinds of commodities are overwhelmingly the exception, and even underline how ‘most economic products are not unique, but rather mass-produced goods’, and there the ‘socially necessary labour-time’ expended in production creates value (p.43). It is not the individual labour that goes into a particular commodity which creates its value. The socially-average amount of labour that is required for commodities of that type determines value, and lies behind a commodity’s ultimate price.

Many of the standard objections to Marx’s interpretation of the labour theory of value start with the mistake of reasoning from the particular commodity or the work of an individual labourer. However, value cannot be determined on the basis of an individual commodity produced by a single worker in particular circumstances, but rather from the perspective of the totality of production. Value is at once tangible in its forms of use value and exchange value, but only exists in the totality, in a social sense, not in an individual, empirical sense. This is a whole area which neo-classical economics abandoned fairly soon after Marx was writing; perhaps, as some have observed, not coincidentally. Current economic theory tends to avoid questions of value altogether, using instead the market-orientated ‘marginal utility’ theory…